Tim Armstrong's Memo To Employees About Acquiring Patch

Our strategy to win in the five areas we’ve discussed starts with
innovation and passion. Of the five areas, Local remains
the largest white space and offers us an ability to improve the
lives of many consumers. It’s a space that’s prime for
innovation and an area where we already have strength with a
local network that reaches more than 54 million UVs a month and a
valuable brand in mapping services, MapQuest.

Our vision isn’t just about optimizing what we have – it’s about
overhauling how we approach this space, drawing on our legacy of
connecting communities and our long history of organization
through DMOZ. It’s about taking one of the most
disaggregated experiences on the Web today and making it truly
quick and easy for consumers to find the local information they
need.

Today, we’re announcing two acquisitions that will enable us to
better serve audiences by providing experiences that are highly
focused on users’ own neighborhoods – Patch and Going.

Patch.com was built to provide local towns with a robust and
interactive platform to publish news and information, with
full-time journalists for each town covering government affairs,
education issues, and community events. One of the AOLers
in our All Hands meeting on May 29 asked what our plan is to help
towns, like his, where the local newspaper has gone out of
business. Patch is an acquisition that may eventually help
that town. Under the leadership of co-founder and CEO Jon Brod,
Patch has been able to launch five initial town sites since
February and has just announced four additional communities.
Moreover, Patch has already received over 230 user requests for
“Patches” spanning 39 states and 12 countries.

The second acquisition is a small company located in Boston –
Going. Going has developed a local events platform to
discover and share information about things to do in a number of
leading cities across the country. Under the leadership of CEO
Evan Schumacher, Going has launched sites in 30 cities –
including New York, Chicago, Los Angeles and Miami – and provides
users with RSVP tools and advertisers with self-service event
advertising.

On a personal note, I was an early investor in Patch and
committed significant dollars to the vision of improving local
communities with deeper online information, accountability
through journalism, and a platform for communicating. In
discussing our local strategy, AOL and Time Warner looked at
Patch as a possible acquisition and I recused myself from that
process. At the Time Warner negotiated acquisition price, I
was in a position to earn a return on my investment in
Patch. However, I have decided to forgo any profit from my
seed investment in Patch and I have asked to receive just my seed
capital in AOL shares once we separate from Time Warner.

Overall, I believe both Patch and Going will add strength and
talent to our local efforts and give us an ability to have a
unique and defendable local offering that helps people improve
their lives. I’m excited that we’ve reached the stage where
we can begin implementing in our five key strategy areas, and
with today’s announcements we’re off to a great start in
Local.

Please join me in welcoming the employees of Patch and Going to
AOL and the future of AOL Local. --TA